Digital advertising across the Internet, World Wide Web, or apps on mobile devices promote products, services, or applications by delivering marketing messages or other digital content in order to attract customers. In such a networked environment, digital advertising typically involves a formal relationship between various actors who work together in an ecosystem. Examples of actors include advertiser devices, publisher devices, and aggregator devices.
Publisher devices may be operated by publishers, which may be entities (companies or individuals) who have an app or a published website where they can show advertisements to their audience. These advertisements (also referred to herein as ads) typically are provided by the advertiser devices, which are operated by advertisers, which may be entities interested in promoting their products, services, or apps to the publisher's audience. A publisher provides ad-slots on their webpage or apps, which may be portions of the webpage or app where an ad can be displayed. A webpage or app may have one or more portions corresponding to ad-slots for displaying ads.
To support the scale required for typical promotion campaigns (also called ad buys), advertisers may engage with more than one publisher to achieve the objectives of the campaign. Advertisers may also engage with ad networks (also called supply side providers or SSPs) that aggregate ad-slots from more than one publisher to provide greater scale for advertisers to buy across a broader audience base. In a similar manner, a publisher with more than one ad-slot may engage with more than one advertiser to fill the ad-slots. Publishers may also engage with advertiser aggregators (also called demand side providers or DSPs) that aggregate advertisements from more than one advertiser to fill the available ad-slots. SSPs may also interact with DSPs to provide greater economies of scale.
The process of selling ad-slots or purchasing advertisements can involve signing contracts for each promotional campaign (also called a flight), determining payment details, and qualifying filtering and targeting criteria for the flight. In addition, the flight can include terms such as ‘daily pacing’ (the advertisement won't be shown in an ad-slot all at once—and will rather be paced over a period of time) and fill guarantees (advertisement contract will be fulfilled in terms of inventory volume). Working with various partners in the ecosystem can be time consuming and the administrative efforts required to negotiate and sign a contract to run the ad (called an insertion order, or IO) can be tedious and manual in nature—further multiplied by the number of partners that must be engaged with to ensure sufficient scale to achieve the objectives of the promotional campaign.
In addition to the administrative burden, publishers (or SSPs) and advertisers (or DSPs) are reliant on one-to-one negotiation between each other. Historically, a rate-sheet (or pricing sheet) of the value of the inventory is established on a per source basis, but heavy discounting may occur (or premiums be applied) depending on different targeting criteria. These targeting criteria can include (but are not limited to) time of day, run of network versus site specific targeting, geographic targeting, placement of ad-slot on webpage or app, supply of ad-slots, or demand for advertisements. Difficulty in understanding the ‘market value’ of inventory can adversely impact both advertisers (or DSPs) and publishers (or SSPs). Publishers may underprice their inventory, and advertisers may run the risk of overpaying for the inventory they require.
The advertiser typically pays a certain price for displaying their ad in an ad-slot. Each placement of an advertisement or other digital content or media in an ad slot is referred to as an impression. Typically, an advertiser pays the publisher a price for each ad impression based at least on an expected return on investment, for example, a viewer of the webpage or app purchasing a product featured in the ad. Impressions that result in some form of action by a viewer of the ad may be referred to as conversions. It should be noted that conversions are not limited to purchase of the product. A conversion can also include the viewer selecting a hyperlink within the ad to access more information about the product.
As discussed above, a digital advertising marketplace can include both a supply side economy, and a demand side economy. The demand side economy includes advertisers (or DSPs) that demand an inventory of impressions for placement of advertisements in the ad-slots. The supply side economy includes publishers (or SSPs) that provide an inventory of impressions for placement of advertisements in the ad-slots. As the volume of publishers SSPs continues to increase, there is a corresponding increase in the number of available impressions for advertisers or DSPs to purchase. In traditional markets, Real-Time Bidding (RTB) may be used to sell available impressions to advertisers. One example implementation of an RTB framework is OpenRTB, described in detail in the OpenRTB API Specification Version 2.3.1, Interactive Advertising Bureau [online]. However, all RTB implementations, whether OpenRTB or not, use the same basic framework of a client-server bidding approach. RTB enables SSPs to acquire impression inventory from publishers and sell it to DSPs using a market-driven bidding approach. In this scenario, SSPs (Supply Side Providers) aggregate supply of impressions and DSPs (Demand Side Providers) aggregate demand for impressions for placement of ads. Together, the SSPs and the DSPs enable an auction-oriented ‘marketplace’. Typically, an RTB environment is made up of each impression being bid on by multiple buyers. The buyers are typically DSPs, although large advertisers may also be able to gain access to the RTB market. Often, the RTB marketplace is set up to award the winning bid to the highest bidder at or just above the offer price of the second-highest bidder's offer.
The RTB, and the roles that DSPs and SSPs play in the sale and purchase of impressions, could be considered as a means to overcome the challenges mentioned above. The problem, in this approach, is that there is still a centralized requirement whereby a particular DSP must be connected to available SSPs. Equally, for a publisher to take advantage of buyers, their integrated SSP must be connected to DSPs that buy inventory from them. In most cases, an advertiser must still consult and work with multiple DSPs—which is complex, inefficient, costly, and time consuming. There is also a concern that by working with multiple DSPs, the advertiser may, in fact, be competing with themselves if both DSPs from which the advertiser is buying are connected to the same SSPs. (In this case, the same advertiser is driving the cost up against themselves via two separate DSPs).
DSPs may also take an Insertion Order and then buy ‘direct’ with specific publishers. This may or may not be known by the advertiser. In the same way, the publisher receiving a sub-order may also turn around and buy from another 3rd party publisher to fulfill this insertion order. This circumstance creates a re-brokering situation that is neither tracked nor accounted for in a true market-driven environment.
As the volume of available impressions continues to increase, advertisers, publishers, and underlying supply chains face increasing levels of complexity in managing demand and supply for impressions, and ensuring that the available impressions are quickly and efficiently sold to advertisers for ad placement, and doing so in an open distributed fashion.
There is a need for an alternative technological approach that enables crypto verified transactions on a distributed ledger, supported by enabling protocols and open to any participating actor in the supply or demand chain.